When all pledged funds are received in an escrow, along with signed lender and borrower documents, we are ready to close. At closing the Mortgage is recorded against the title of the borrower’s property, in the name of investor(s). Your investment is secured by the recorded mortgage. After recording the funds are released from escrow to the borrower. For mortgages that have already closed and those that are seasoned all pledged funds are deposited into an assignment escrow. The mortgage is then assigned to the new owner(s) and assignment recorded. After recording the funds are released from the assignment escrow to the seller(s) of the mortgage.
Once escrow has closed, the mortgagor will make the payments directly to the investor(s) unless a servicing arrangement has been made. The interest payments can go directly into your bank account or as in most cases, the borrower will write you twelve post-dated cheques for the monthly payments.
When the borrower is ready to pay off their mortgage, a final interest payment, if any, will be made to you along with your remaining principal balance. Your capital is then ready to reinvest.